EV Charging Wars — It’s VHS Vs Betamax All Over Again

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Standards matter. New technology is great, but it needs to be accessible to all potential customers in order to be commercially viable. Ford shocked the EV world last week when its CEO, Jim Farley, announced that beginning next year, Ford EV drivers would be able to charge at Tesla Supercharger locations using an adapter, and that in 2025, his company would begin installing charging ports in its electric vehicles that are compatible with the North American Charging Standard (NACS) pioneered by Tesla more than a decade ago.

What’s the big deal with standards? Let’s take a look. Imagine you have an incredible thingamajig that everyone in the world wants, but it operates on 67.4 volts of alternating current at 127 hertz. Oh, and it uses a special pentagonal plug, too. Would you invest in that company?

Here’s another example. Company A decides the wheels on its cars should be 67 centimeters in diameter. Where are you going to find tires to fit? Company B decides to make sheetrock that is 42 inches wide. Will either one be successful? Not likely. Without standards, commerce comes to a screeching halt.

A Shot Across The Bow

Bloomberg Hyperdrive said in an email recently that the announcement by Ford is “a shot across the bow of EVgo and ChargePoint, as well as Electrify America. If these companies are unable to step up their game and deliver better charging experiences, there’s a risk Ford’s defection to NACS won’t be the last.”

Reilly Brennan, a founding general partner of Trucks Venture Capital, wrote this week in his Future of Transportation newsletter, “This is at once the most pragmatic and revolutionary step that Ford has made on EVs.” He compared it to the decision by Ford to build a battery-electric version of the F-150 pickup — the best selling Ford product of all time. “The other automakers who have been pretending that EVgo, ChargePoint and Electrify America are ‘good enough’ must now finish up their tummy time and arrive at something that is equal to or better than accessing Tesla Superchargers.”

VHS Vs. Betamax

Bloomberg called the struggle between the NACS charging standard Tesla uses and the CCS standard used by virtually every other manufacturer a rematch of the great VHS versus Betamax battle in the 1970s. Sony had an edge because it dominated the consumer electronics business at the time and its Betamax product had better picture quality. But JVC’s VHS video tape format won out because not only were the tapes much cheaper, but they could record an entire 2-hour-long movie, something Betamax could not do.

There is another important factor in favor of the Tesla standard. It works seamlessly and properly virtually every time. In survey after survey, customers tell JD Power that Superchargers are superior to every other charging network in North America. Not only that, there are more of them than there are CCS chargers. Tesla says it has 60% more charging points than all the CCS networks combined.

Tesla also has a first mover advantage, Bloomberg says. They are usually found in prime locations that are safe and convenient, according to Gary Silberg, global automotive sector leader for consultant KPMG. Tesla’s chargers are simple and elegant to use and “a fantastic secret sauce,” he said.

“GM and others are going to have a big choice to make,” Farley told CNBC last week. “Do they want to have fast charging for customers, or do they want to stick to their standard and have less charging?”

Is Seamless Charging Possible?

“There’s many a slip twixt the cup and the lip,” my old Irish grandmother liked to say. Seamless charging for Tesla customers who have an account with the company and a credit card on file is one thing, but there are lots of barriers to setting up a system that works for a number of different vehicles from different manufacturers.

A neighbor of mine worries if I handle my charging cable when it’s wet out. I have to explain to him that holding a charging cable is not the same as holding a live wire that has been downed by a falling tree branch. When I plug in, there is a digital “handshake” that takes place between my car and the charger. Only when all the computer protocols have been satisfied does electricity start to flow through the charging cable.

Different manufacturers have different protocols and the Tesla Superchargers will need to work with all of them. Then there is the issue with payment. The charger needs to know that the electricity supplied will be paid for before any electrons flow.

There are physical limitations as well. Tesla owners know to back up to a Supercharger so the relatively short charging cable can reach the left rear corner of the car where the charging port is located. But some cars have their charging ports in the front, or on the front fender or behind a rear door. Those short cables on a Supercharger simply won’t be able to reach the charging ports of some vehicles.

Then there is the issue of larger vehicles like pickup trucks that may be towing a trailer. Most gas stations are set up so drivers can pull through to refuel, but most EV charging locations are unable to service longer vehicles or those pulling a trailer.

Biden Charging Funds Favor CCS

The Biden administration has made billions available to install half a million EV chargers all across America, not just along transportation corridors, but in cities and rural areas as well. However, to get the federal money, providers have to agree to use the CCS standard. Jim Farley did not address that requirement when he made his announcement last week.

Tesla wants to get its hands on some of those federal dollars and has agreed to open some of its Superchargers to drivers of other electric cars, but will apparently need to add CCS charging cables to some of them. In other words, the announcement by Jim Farley does not mean the tension between NACS and CCS is over. Not yet, anyway.

Nick Nigro, founder of the consultancy Atlas Public Policy, told the Financial Times this week, “Everyone will get affected in some shape or form if Tesla’s charging network continues to grow and reach more types of vehicles. [Tesla is] seeing the opportunity of where the market is going, and they know they have a good charging service. They think they’re ready to do that for all vehicles now.”

Jonathan Levy, chief commercial officer at EVgo, said simply, “Getting to EV ubiquity means having more fast charging, and so Tesla will have more, we will have more, our competitors will have more, and we’ll continue to grow the pie.”

The Takeaway

Everyone agrees the Tesla NACS standard is the superior product. You can see it in the connector that plugs into the charging port. The Tesla connector is small and sleek. It looks like something that was designed by Apple’s storied Jony Ive. By contrast, the CCS connector is big, clunky, and about as stylish as a mattock.

Has the federal government backed the wrong horse in its quest to rapidly expand EV charging in America? That’s the $7.5 billion question.